Buying or selling a house is daunting enough as it is, without all the jargon. We're here to help. In this blog, we're covering what a memorandum of sale is, at what stage in the sale process it comes in to play, and other useful information around the document.
What is a memorandum of sale?
In simple terms, a memorandum of sale is a document relating to the 'sale agreed' part of purchasing a property. It details the possible buyer's interest in buying the house and the seller's terms of the sale. It's important to note that a memorandum of sale isn't legally binding, instead it's a written confirmation that a price has been agreed and both the buyer and seller want to go through with the sale.
What does a memorandum of sale contain?
There are a few points that a memorandum of sale should include. The most basic information are the names and contacts of the buyer and seller. Solicitor's details for each side is included, as well as the property's address, tenure, details of lease and any special conditions such as planning restrictions. Other information in a memorandum of sale is the sale price of the property that has been agreed as well as the deposit amount, and which mortgage lender may be being used.
When does a memorandum of sale come in to play?
Once an offer is made and accepted, the estate agent drafts the memorandum of sale and sends it through post or email. The conditions of the memorandum are still able to change. Once the memorandum of sale is signed, the buyer may schedule a survey on the property to determine if the price offered is reasonable. Once the buyer is happy, both they and the seller signs a final sales contract. This is legally binding once exchanged by each side's solicitors.
What problems can arise with a memorandum of sale?
A chain break is one cause of a memorandum of sale to fall through. This is when somewhere in the property chain a party drops out and causes all other parties in the same chain to be at risk of falling apart. This can cause lots of upset and frustration as a buyer's dream home may slip between their fingers. A way to try and decrease the risk of a chain break is to use a decent solicitor, ideally one who is recommended by a friend or family member. Honesty is the best policy, be organised and truthful throughout the buying or selling process. If you're buying, only consider properties which you can afford and get a morgage for. If you're selling, be fair about the condition of the house and also the asking price.
Don't want to risk a chain break?
If you've found a house you'd like to buy and would hate to miss out, check out our fast buying service. We are able to buy your property in as little as 7 days so you can be rest assured that you'll be moved into your dream home as soon as possible. Get a cash offer for your home.